CytoTherapeutics Reports First Quarter Results

Business Editors and Health/Medical Writers

LINCOLN, R.I. -- (BW HealthWire) -- May 13, 1999 -- CytoTherapeutics, Inc. (NASDAQ:CTII) today reported a net loss for the quarter ended March 31, 1999 of $1,933,000, or $0.10 per share, compared to a net loss of $3,519,000, or $0.19 per share, for the first quarter of 1998. Revenues from collaborative arrangements for the first quarter of 1999 were $2,501,000, compared with $1,843,000 in the first quarter of 1998. This 36% increase in funding is primarily due to an increase in revenues from the Development, Marketing and License Agreement with Astra AB, the company's partner for the pain control implant.

Research and development expenses totaled $3,567,000 for the three months ended March 31, 1999, compared with $4,500,000 for the same period in 1998. The decrease of $933,000, or 21%, from 1998 to 1999 was primarily attributable to a reduction in spending on research agreements and a reduction in research and development personnel expenses.

General and administrative expenses were $995,000 for the three months ended March 31, 1999, compared with $1,147,000 for the same period in 1998. The decrease of $152,000, or 13%, from 1998 to 1999 was primarily attributable to a reduction in recruiting and relocation expenses. At March 31, 1999, the company had cash, cash equivalents and marketable securities totaling $13,741,000.

In early April, after the close of the first quarter 1999, the company received an additional $2.5 million from Astra to fund development of the pain program through June 30, 1999.

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CytoTherapeutics Inc. is a biotechnology company focused on the development of cell-based therapeutics. The company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. The company's encapsulated-cell technology is designed to treat a number of serious diseases and disorders of the central nervous system (CNS), including chronic pain, by delivering therapeutic proteins directly to the CNS. For additional information, visit the company's Internet web site at http://www.cyto.com.

Statements in this press release other than statements of historical facts constitute forward looking comments regarding, among other things, future business operations. The company's actual results may vary materially from those forward looking statements due to risks and uncertainties to which the company is subject, such as failure to achieve required product development, delays in obtaining, or failure to satisfy conditions imposed for, regulatory approval, the need to raise additional capital, risks of third-party intellectual property, adverse clinical developments, and other risks, which are described in Exhibit 99 to the company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward Looking Statements."


CytoTherapeutics, Inc.
Selected Consolidated Financial Information (unaudited)


Condensed Consolidated Statements              Three Months Ended
of Operations                               March 31,        March 31, 
                                              1999             1998
Revenue from collaborative
 arrangements                            $  2,501,035    $  1,842,975
Operating expenses:
  Research and development                  3,566,557       4,499,662
  General and administrative                  995,459       1,147,006
                                            4,562,016       5,646,668
Operating loss                             (2,060,981)     (3,803,693)
Investment income, net                        128,286         285,156
Net loss                                  ($1,932,695)    ($3,518,537)

Net loss per share                             ($0.10)         ($0.19)
Weighted average number of common
 shares outstanding                        18,452,297      18,184,474


Condensed Consolidated Balance Sheets
                                           March 31,      December 31,
                                             1999             1998
Cash, cash equivalents and marketable
 securities                               $13,740,935     $17,385,727
Prepaids and other current assets             832,041       1,048,283
Property, plant and equipment, net          7,946,806       8,356,009
Other assets                                6,074,190       6,075,663
Total assets                              $28,593,972     $32,865,682

Total current liabilities                  $3,537,847      $5,547,824
Long-term obligations and other
 long-term liabilities                      3,461,258       3,984,340
Redeemable common stock                     5,248,610       5,248,610
Common stock to be issued                     187,500         187,500
Total stockholders' equity                 16,158,757      17,897,408
Total liabilities and stockholders'
 equity                                   $28,593,972     $32,865,682

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     CONTACT: CytoTherapeutics, Inc.      CytoTherapeutics, Inc.
              Richard M. Rose, M.D.       Elizabeth A. Razee
              (401) 288-1000 ext. 2201    (401) 288-1000 ext. 2132

     KEYWORD: RHODE ISLAND MASSACHUSETTS
     INDUSTRY KEYWORD: BIOTECHNOLOGY MEDICINE EARNINGS